Learning Team B Assignment Week 4 C4-1 At a recent staff meeting the vice president of marketing appeared confused. The controller had assured him that the parent company and all of its subsidiary companies had properly accounted for all transactions during the year. After several other questions he finally asked “If it has been done properly, then why must you spend so much time and make so many changes to the amounts reported by the individual companies when you prepare the consolidated financial statements each month? You should be able to just add the reported balances together?” Prepare an appropriate response to help the controller answer the marketing vice presidents question? October 24, 2012 TO: Vice President of Marketing

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FROM: Controller RE: Consolidated Financial Reports Combining financial statements into consolidated financial statements is a time consuming process. There are programs that can make the task less time consuming, nonetheless, consolidated financial statements must be prepared for the economic entity all together.

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